Supporters of the “Midtown Mile” remain bullish on the dream to re-brand Midtown’s main corridor as an upscale retail district — despite a souring economy and tightening credit markets.

They only need to point to 12th & Midtown, the $2 billion project from Daniel Corp. and Selig Enterprises Inc. that is already transforming four city blocks. The massive development is a key component of the Midtown Mile, a vision for a 14-block stretch of Peachtree Street that calls for a shopping destination modeled after Chicago’s “Magnificent Mile” and New York City’s Madison Avenue.

The first phase of 12th & Midtown, known as 1010 Midtown, recently announced the signing of leases with four restaurants to fill its restaurant row on Crescent Avenue and will begin moving residents into its 35-story mixed-use tower next month.

“There are some strong projects that do have the capital funding they need and are under way,” said Shannon Powell, executive director and chief operating officer of the Midtown Alliance, the group guiding the Midtown Mile. “We are at a point where we will have enough space to pull it together and allow it to germinate and take off.”

The four restaurants at 12th & Midtown are slated to open in early 2009, leaving a restaurant spot facing Peachtree left to fill, along with about 16,000 square feet of flagship retail space that is also along Peachtree, which the project hopes to commit by the end of the year, said Shirley Gouffon, Selig’s senior vice president.

The company also is looking to begin announcing tenants for 50,000 square feet of retail in 1075 Peachtree, Phase II of 12th & Midtown, during the first quarter of 2009, she said.

“The residential and daytime population numbers are just so compelling, and there really isn’t significant retail to support it,” Gouffon said. “Even in this tough economy, that it is why we are seeing such vast interest from national and international retailers. They see this thriving demographic.”

Where the sluggish economy and slowed credit markets have hurt 12th & Midtown is with condominium sales at 1010 Midtown. As the project looks to deliver the remainder of 425 residential units in March, only 25 percent of them are under contract, said Steve Baile, senior vice president for Daniel’s Atlanta operations.

“We’ve had tremendous traffic, but it is tougher to get people off of the fence,” Baile said. “Only time will tell on that. The credit crunch is a big part of that.”

But what is helping 12th & Midtown weather the economic storm is construction already being under way, he said.

“We are under construction and you can come see and feel it and touch it. That gives us a little bit of an advantage. We can offer so much critical mass in our overall planning and that starts to make it look attractive as well,” Baile said.

The slowing economy has played a role in the repositioning of another Midtown Mile participant. While Jamestown continues talks with possible tenants for the street-level retail space it wants to add to its

999 Peachtree, work on extending the building to 10th Street and developing retail space on both the 10th Street and Peachtree fronts has slowed, said Matt Bronfman, managing director of Jamestown.

“We are as bullish as ever, but the plan will take longer because of the economy,” Bronfman said. “I’d like to see us have something in 2009.”

Over the long-term, Midtown’s booming residential and daytime population, its cultural attractions, and links to public transportation and the interstates make it an attractive market even if a sour economy might impact the current pace of development and interest from retailers, said Kirk Williams, a broker with Cushman & Wakefield of Georgia Inc., a global real estate services company.

“There is a synergy in that market,” Williams said. “Midtown Mile is a long-term vision and I don’t see the economy having a significant impact on existing spaces getting leased. The challenge with the credit market is for developers who have projects they would like to get out of the ground; that is the difficult climate.”